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Middle class about to disappear in Armenia

12 July 2014 [10:15] - TODAY.AZ
By AzerNews

The middle class is the economic mainstay of any state. The people belonging to this social group have stable incomes which are sufficient for meeting a wide range of economic and social needs.

Armenia is on the verge of losing this social group, because the middle class is emigrating from the country. Local sociologists have expressed worry that the high unemployment rate in several regions is forcing people to emigrate. They say poor people are unable to leave the country in search of a better life because of lack of money, so mainly the middle class is emigrating from Armenia.

The unemployment rate in Armenia is 17.8 percent, which is the highest among the CIS and South Caucasus countries. The indicator is 25.4 percent in cities and 6.8 percent in villages.

The middle class cannot be formed in Armenia, because the business environment is not favorable or competitive, local economists believe. They note that the small and medium enterprises (SMEs) are in a vulnerable position.

The monopolization of Armenia's economy seriously hampers the development of SMEs. Armenia's small economy suffers seriously from monopoly, and monopolies and oligopolies possess about 60 percent of the shares in Armenia's market. Only small- and medium-sized businesses under the roof of oligarchs or officials are protected.

The new government is still not in any hurry to fulfill its promises on creating favorable conditions for SMEs. "We will take positive steps for small and medium enterprises in the near future," Prime Minister Ovik Abramyan promised after his appointment to the post.

Abramyan's statement on SMEs remains abstract, since he himself is one of the oligarchs who are hampering SMEs' development.

The10 percent price hike in electricity tariffs from August 1 will lead to an increase in poverty in the Armenian society. It will also make the middle class vulnerable, which is particularly dangerous, because this social group is like a buffer and controls sharp changes

Polarization of the society in Armenia is turning into a pressing problem, as it will bring about negative consequences for the society's development as a whole.

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